Their talks were to focus on the launch expected within days of US-brokered indirect negotiations between Israel and the Palestinians, a process suspended since the Gaza war of December 2008-January 2009.

Netanyahu’s visit comes amid a flurry of diplomatic activity two days after the Arab League came out in support of the so-called “proximity talks.”

The Israeli premier was accompanied in Sharm el-Sheikh by the chairman of the National Security Committee, Uzi Arad, and Industry and Trade Minister Benjamin Ben Eliezer.

The indirect talks were set to start in March but were scuttled after Israel announced it would build 1,600 new homes in an east Jerusalem settlement.

The Arab League on Saturday gave its green light for the talks to go ahead after the Palestinians received US assurances that the construction would be shelved, an official of the pan-Arab organisation said.

An Israeli official said Netanyahu, who insists on unconditional direct talks with the Palestinians, was to ask Mubarak to pressure Palestinian president Mahmud Abbas to “go forward.”

Mubarak, a strong backer of Abbas, has supported the Palestinian demand for a complete settlement freeze in occupied Palestinian territories and east Jerusalem before direct talks can resume.

Israel has offered a limited halt to settlement construction in the West Bank that did not include building in east Jerusalem, occupied and annexed in 1967.

The Palestinians want the West Bank and Gaza for a future state, with east Jerusalem as its capital.

The Netanyahu-Mubarak meeting comes ahead of another visit by US envoy George Mitchell to the region.

He is expected to meet Abbas on Friday and the Abbas-led Palestine Liberation Organisation is expected to endorse the indirect negotiations proposal the following day.

The latest diplomatic developments raise hopes of a resumption of Middle East peace talks that were suspended in December 2008 when Israel launched an offensive on the Gaza Strip in response to rocket fire.

According to the Israeli newspaper Haaretz, Netanyahu intends to raise issues he considers crucial to Israel’s security in the event of a peace deal, such as a demilitarised Palestinian state and control of borders and airspace.

The Arab League on Saturday stressed that the indirect talks would not immediately be followed by direct negotiations, holding fast to Abbas’s demand for a complete end to settlement building first.

It will be Netanyahu’s first visit to Egypt since December.

The two countries maintain a cold diplomatic relationship and Egypt has often acted as broken between Israel and Palestinians.

Cairo has sought to mediate exchanges of prisoners between Israel and Abbas’s rival, the Islamist Hamas movement which controls the Gaza Strip and holds a captured Israeli soldier, Gilad Shalit.

Those talks have been deadlocked over disagreement on Palestinian prisoners convicted for attacking Israel. Hamas says they must be released in return for Shalit.